French must pay more for healthcare
January 23, 2004

PARIS (Reuters) - The French must expect to pay more for its vaunted health system otherwise it will add 29 billion euros a year to the country's public budget deficit by 2010, a study presented to the government on Friday concluded.

Launching the debate on what could be the most controversial welfare reform of President Jacques Chirac's second term, the report slammed inefficiencies that encouraged French doctors and patients alike to waste healthcare resources.

The report by the High Council for the Future of Health Insurance - made up of representatives of trade unions, health funds, medical workers and the private sector - is part of the preparation of healthcare reform legislation due by end-June.

It follows a one-day warning strike on Thursday by doctors and hospital workers to demonstrate over hospital understaffing and their fears of a creeping privatization of the sector.

"The High Council believes that general confusion over who is in charge of what partly explains the excesses and certainly favors them," it said, adding the system was "badly regulated and badly governed."

"Everyone - institutions, healthcare professionals and social security contributors - will have to change their behavior," the report, presented to Health Minister Jean-Francois Mattei, concluded.

Receiving the report, Mattei said the it would form the basis of further consultations within the health sector to be launched next month before legislation is finally drafted.

"I share both (the Council's) concerns and its analysis on what sort of action is required," he added.

French general practitioners prescribe on average 260,000 euros worth of drugs a year. The French consume three times as many antibiotics as their German neighbors, and more than twice as much anti-cholesterol drugs as the British.

The study suggested costs could be recouped by cutting reimbursements given to patients for their prescribed medicines or by increasing revenues raised by the CSG welfare levy, an income-related levy that is widely paid in France.

Chirac's government, which was elected on ambitious pledges to cut taxes, has said it would be reluctant to increase the CSG, a move the country's top business lobby also opposed.

"Any tax measure taken would only have the effect of destroying the upturn that is in the offing," said Guillaume Sarkozy of the Medef business group.

Created in 1945, the French healthcare system draws funding from the CSG and other levies on companies and workers. People also subscribe to non-profit health insurance cooperatives known as "mutuelles."

The report said medical advances, the aging population and demand for more costly treatment would mean health spending rising past the current nine percent of gross domestic product, one of the highest levels in the world.

That will mean a healthcare deficit projected at 10.9 billion euros this year rising to 29 billion by 2010 and 66 billion by 2020 if unchecked, it estimated.

The healthcare deficit will account for nearly a fifth of a total public deficit this year that has again put France in breach of euro zone budget rules. Paris has pledged to bring the deficit down to within accepted levels by 2005.

The French have grown used to a level of healthcare that is the envy of many other countries, but medical workers insist there is a growing strain on resources. Some say this was a factor behind the 15,000 deaths in last summer's heatwave.